Further guidance on the Coronavirus Job Retention Scheme – 4 April

On 4 April HMRC issued further guidance on the CJRS. Whilst this latest guidance answers a number of questions there are still many points where further clarification is needed.

Full guidance is available here https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

Key points to note:

• The scheme is available to all employees, in all businesses. Previous guidance suggested it was limited to those employees who would have been made redundant; it is in fact open to all employees provided the employer had enrolled them for PAYE online.

• Apprentices can be furloughed as other employees, and they can continue to train whilst furloughed. However, Apprentices must be paid at minimum wage for the time they spend training. Any shortfall between the amount you can claim for the apprentice’s wages through this scheme and minimum wage must be met by the employer.

• Employees who are getting SSP cannot be furloughed, they remain on SSP, but once they have “returned to work” from sickness, they can be furloughed

• Employees who are shielding in line with public health guidance, or employees with caring responsibilities and who are unable to work (such as those with childcare issues) can be furloughed

• An employee who has been furloughed CAN work for another employer. This cannot be for the same employer as they can only volunteer or do training for the employer who has furloughed them, but they are permitted to work for another company but this is only if they are contractually allowed to do so. This means they can earn 80% from furlough, and 100% in a new job.

• You can claim for regular payments you are obliged to pay your employees such as wages, past overtime, fees and compulsory commission payments. Discretionary bonuses, commission payments and non-cash payments should be excluded.

• The 80% that can be claimed back does not include non-monetary benefits such as the value of health insurance or a company car

• HMRC have agreed that the coronavirus counts as a life event that could warrant changes to salary sacrifice arrangements, if the relevant employment contract is updated accordingly

• Employees can be furloughed multiple times as long as each separate period is for a minimum of 3 consecutive weeks

• If you are employed by your own umbrella company, your umbrella company can furlough you.

• Company directors can be furloughed but can only perform their statutory duties for the Company. This is very limited, and includes filing annual returns, board meetings etc. The furlough would have to be part of a formal board decision, noted in the company records, and the company should ensure they have a paper trail of this decision and that it is communicated in writing.

• An employee must be notified in writing of their employee status, and you must retain furlough records for 5 years.

To access our latest handout, click the link below

The Coronavirus Job Retention Scheme and Furlough

What is still unclear:
HMRC are still to issue specific guidance about whether employees can take annual leave whilst they are furloughed, and what their pay for such leave would be. In light of the change in annual leave rules to enable employees to carry over unused holiday for up to 2 years, many employment lawyers think it is unlikely that HMRC will expect or indeed allow employees to take annual leave during any periods of furlough leave. Given the current uncertainty it could be suggested that if an employee wants to take holiday, their furlough leave be terminated after no less than 3 weeks, they take their holiday and then if necessary, be placed back on furlough leave again for at least another 3 weeks (if this does not take them beyond the end of the Furlough Scheme, currently due to end on 31 May 2020).

Should you require assistance with the above changes or have any issues around furlough or payroll, please contact Sarah Ashton sashton@garbutt-elliott.co.uk who will be happy to help.